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"On-sold over-cap" properties - Don't miss the deadline! - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
"On-sold over-cap" properties - Don't miss the deadline! - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
"On-sold over-cap" properties - Don't miss the deadline! - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
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“On-sold over-cap” properties – Don’t miss the deadline!

July 2020

Sarah Manning

On 15 August last year the Government announced a new “ex gratia” support package for eligible owners of “on-sold over-cap” properties in Canterbury. This was in response to the many problems that have come to light over recent years relating to shoddy earthquake scoping and repairs.

The deadline for eligible homeowners to make an application to EQC was recently extended to 14 October 2020.

If you (or anyone you know) has bought a property post-earthquake, believing it to have been repaired, and you have subsequently discovered that the property has not been properly repaired, then the ex gratia package could benefit you.

The main purpose of the package is to provide funds to eligible owners to cover the “over-cap” portion of the repair costs, where private insurance will not cover the cost of the repairs.

To qualify, you must satisfy certain criteria:

  • You must be the current owner of the property
  • You must apply by 14 October 2020
  • You must have bought the property on or before 15 August 2019
  • The original owner must have lodged at least one claim with EQC, and the claim must have been assigned to you. If for some reason the claim was not assigned to you at the time you bought the property, it is still sometimes possible to get the claim assigned to you now.
  • Before you made your offer to buy the property, the property must have been assessed by EQC as being “under cap”.

If you are deemed to be eligible, then a scope of works will need to be agreed on. The aim of the support package is to remediate defective or non-compliant repairs, and to also pick up on (and fix) any missed damage.

The Government has set up a team of people in Christchurch to work on the “on-solds”. The process is being carefully managed, with various rules around how the repairs are to be carried out and how the payments are to be made. For example, if there is only a small amount of repair needed (up to $15,000) then a lump sum payment will be made to the homeowner. If the repairs are costed at between $15,000 and $150,000 then the payments will be staged, with 4 payments being made as the repair work is carried out. If the repairs are costed at more than $150,000 then a caveat will be recorded on the property’s title (and removed once the code compliance certificate for the repairs has been issued).

We are assisting clients to work through this process, and have helped many clients resolve their earthquake related issues – please contact Sarah Manning, Partner (DDI 03 343 8456 / sarahm@mmlaw.co.nz), if you have any questions.